And of course, that will help mix. Absolutely. And as I said, the sales pipeline approach that we’re taking has a very disciplined view toward conversion from the highway, both in the merchandise as well as the intermodal space. And I would say, as far as capacity is concerned, we’re improving execution and plan compliance and that facilitates blocking deeper into our network, which ultimately increases car velocity, train speed and really drives performance. That applies to intermodal, merchandise and bulk. And we’re actively engaging and challenging every asset that we’ve got out there. Just in the last 30 days, I’ve approved the elimination of over 487 turnouts that were redundant. We’re turning over every rock, big or small to look for improvement and consistency.
Operator: Thank you. Our next question is from the line of Jason Seidl with TD Cowen. Please proceed with your question.
Jason Seidl: Thank you, operator. John, I wanted to talk a little bit about the new PTO and sick leave regulations and how much of an impact that you’ve seen there and sort of what you expect going forward? And then I guess a quick follow-up is, when you look at sort of the whole network, how are you viewing some of the yards? And is there a chance that you look to close a yard to down the road? Thanks.
John F. Orr: Yes, obviously the sick leave is a national issue. I think no different than any other regulated or introduced crew limitation. We all have to deal with it. What I’m really focused on is crew productivity and yard productivity and increasing the capabilities of each assignment to do more within the timeframe they’ve got to work. And so, delivering more getting accountability to connections, getting yield on our trains, that’s the most important piece. And, we’re balancing that. I’m on the team every day on crew availability to make sure that whatever we’ve committed to with our labor organizations or through the CBA process that we’re living up to that. And, on the flip side, making sure that the unions understand that they have an obligation to come to work within the timeframes dressed and ready to deliver for our customers each and every day.
So, it’s both sides of that coin. As far as the terminals are concerned, the reason when I started with hump yards is because they can add a lot of value. They can drive a lot of mechanized performance. But, as we all know, they’re costly. I want to get the most yield I can get out of them. I’ve already challenged our yard plan from yard-to-yard, node-to-node and we’ve started to eliminate power imbalances at a place like Chattanooga. We’ve reduced the bunching in the terminals by re-establishing a terminal clock at all of the major terminals. And, we’ve even decreased a number of assignments that were moving cars and causing multiple handlings between the yards. So, I would say everything’s open. I’m challenging the historic reason for a yard, so that whatever we do is going to meet the operational need of today and tomorrow.
So, everything’s on the table, everything’s being scrutinized and we will be rolling out a redefined yard operating plan and yard operating strategies in the next 30 days. And, that will then drive our re-design of most of the operating plan over the next 60 days to 90 days.
Operator: Our next question comes from the line of Jeff Kauffman with Vertical Research. Please proceed with your question.
Jeff Kauffman: Thank you very much. John, just kind of a question on your impression coming in. As you were an outsider, you had a certain view of what Norfolk might and might not have been able to do. Now you’re an insider. You’ve had a chance to see an operation. I guess my question is twofold. Number one, what’s different about when you actually came on Board and got a chance to get out there and see what’s going on? And, then my second aspect of that is, what do you think somebody on the outside might not appreciate about the Norfolk network and what can and can’t be done?
John F. Orr: Well, that’s a great question. I’m glad you asked it. I’ll tell you in my first official act with boots on the ground was to go to East Palestine and really understand the scope of that issue. Because I’ll tell you, I’ve been a railroader for over 40 years. I’ve been the incident commander at a number of derailments, some very consequential and some that I’ve had to make those same decisions that were made here to resolve imminent safety concerns and understanding the scope and scale of the commitment that NS has made to that community, I’ve never experienced anything like that. And, so I came in with a bias and really had to understand the magnitude of that event and how that could have had a more lasting impact across not only NS, but the sector.
As I looked at our operations, I always have a bias for yards, because I think yards, especially in a merchandise environment are where cars and customers kind of coincide. So, how we handle them, how we accelerate or drag is really important to evaluate. And, so I was pleasantly surprised at the richness of the terminals, but also quickly realized as I got under the hood that, that was where a lot of the underperformance was happening. And, that’s why I set up a task force to kind of look at the data and drive performance through data, but also had a field component to check-in a balance to make sure that we were driving was actually going to add performance and not undermined or burn something down that didn’t need to be either intentionally or unintentionally.
So, I think having a good perspective of what the network looks like, as an outsider, you have biases. As an insider, you start to get under the hood and realize, okay, here may be a big rock issue, but then you get to know the smaller rocks that need to be moved out of the way to create that momentum. I’ve made a career out of going across Canada, the United States and Mexico, unclogging drains and creating a lot of momentum and then leveraging that momentum to build very competent, capable service plans, very competent, capable operators of those service plans and creating sustained improvements. And, that’s what I’m seeing right now. I think the architecture of NS is solid and it does come down to execution. And, it’s a very complex non-linear network.
